Short answer. The written wording is what governs your exposure to outsiders. As far as third persons are concerned, anything within the terms of the document counts as within your agent's authority, even where you privately told him to do less. Someone who never read it, though, cannot rely on authority the paper does not give.
What the law says
So far as third persons are concerned, an act is deemed to have been performed within the scope of the agent's authority, if such act is within the terms of the power of attorney, as written, even if the agent has in fact exceeded the limits of his authority according to an understanding between the principal and the agent.
Civil Code, Article 1900 — Scope as Written Binds Third Persons. Read the full provision →
The document is the public face of the authority
An agency has two versions: the written one the world can see, and the private understanding between you and your agent. This article decides which of them outsiders live by. Their yardstick is the power of attorney as written, and an act within its terms binds you even if the agent broke a side agreement in doing it. Telling your agent by phone not to accept less than a certain price, while the document he carries authorises him to sell outright, leaves you bound to the buyer. Your remedy is against the agent for disregarding your instruction, not against the person who dealt with him.
Then why does it matter whether they read it?
Because the protection runs only as far as the terms. Nothing in the article authorises acts the document does not cover, so a person who never asked to see it is not shielded from what it fails to say. He is simply guessing about the outer limit, and if the agent's act falls outside the written terms, he is dealing with someone who had no authority — his own ignorance does not repair that. The rule protects those who rely on the writing. It does nothing for a person who relied on the agent's own account of his powers, and that is the situation this question usually arises from.
Write the document as if strangers will act on it
The practical lesson runs entirely to drafting. Every limitation you actually want must appear in the instrument, not in a message or a conversation. If the sale requires a floor price, say so in the document. If collection is allowed but disposal is not, say that. Beware the closing catch-all — a clause authorising the agent to do everything necessary to accomplish the purpose can undo the careful list above it. Some acts, such as selling or mortgaging real property, need a special power expressed in specific terms, and vague general language is worth checking closely before it is signed and notarised.
If you are the one dealing with an agent
Ask to see the original power of attorney and read it against the transaction in front of you, rather than accepting a photocopy and a reassurance. Check that it covers the specific act, that it identifies the property or the matter, and that it has not lapsed. Where you can, confirm with the principal directly. Keep a copy on file. That copy is what places you inside the protection this article gives, and its absence is what turns an ordinary deal into an argument about whether the person you paid was ever entitled to receive the money.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Magkakasama Sa Sakahan vs. Commission on Elections and Soliman Villamin,Jr, G.R. No. 262975, May 21, 2024 — read the decision on LawPhil →
- The Consortium of Hyundai Engineering Co., Ltd. and Hyundai Corporation vs. National Grid Corporation of the Philippines, G.R. No. 214743, December 4, 2023 — read the decision on LawPhil →
- San Miguel Corporation vs. Leonara Francisco Vda. De Trinidad, et al, G.R. No. 237506, July 28, 2020 — read the decision on LawPhil →
- Belina Cancio and Jeremy Pampolina vs. Performance Foreign Exchange Corporation, G.R. No. 182307, June 6, 2018 — read the decision on LawPhil →